Renowned investors Michael Novogratz and Anthony Scaramucci offered striking assessments on the regulatory frameworks and current state of the cryptocurrency market that will shape its future.
Speaking after his meetings in Washington, Novogratz said he was “optimistic” about adopting the cryptocurrency market’s billing structure, but noted that a major power struggle was taking place behind the scenes.
Based on his observations in Washington, Novogratz said there is strong desire on both the Democratic and Republican sides to pass the law. He specifically mentioned that Democrats wanted to take this issue off the table before the election to avoid appearing “anti-crypto.” According to Novogratz, the fate of the law will become clear over the next month.
One of the most striking aspects of the news has been the pressure placed on the cryptocurrency sector by the traditional banking lobby. Novogratz said banks are trying to influence stablecoin regulation in their favor by using significant lobbying power.
He said that banks fear a shift of deposits to stablecoins and therefore must prevent stablecoin companies from paying interest/yields on balances.
Novogratz said the industry may lose this battle for now, adding that “perfect should not be the enemy of good” and that it is more important that the law passes with some compromises to pave the way for the industry.
Novogratz argued that traditional banks (JP Morgan, Wells Fargo, etc.) pay almost no interest on savings accounts, whereas stablecoin and DeFi (decentralized finance) solutions offer a much more transparent and profitable alternative to consumers.
Addressing the technical outlook for cryptocurrencies, Novogratz said that Bitcoin is currently in a period of consolidation. He cautioned investors against bullish enthusiasm unless Bitcoin breaks the $100,000-$104,000 range and stays permanently above that level.
*This does not constitute investment advice.
